Cogent Communications Q3 revenue falls, adjusted EBITDA misses estimates
Overview
US internet service provider's Q3 service revenue fell 1.8% sequentially and 4.4% yr/yr
Adjusted EBITDA missed analyst expectations, while loss per share and EBIT loss was smaller than expected
Company suspended its dividend program in Q3
Outlook
Cogent plans to sell four data centers for about $100 mln in cash
Company did not provide specific financial guidance for upcoming quarters in its press release
Result Drivers
CURRENCY IMPACT - Co said foreign exchange rates negatively affected service revenue growth by $0.3 mln sequentially and $0.5 mln yr/yr
WAVELENGTH GROWTH - Co said rising demand for optical wavelength services drove revenue increases in this segment
LOWER OPERATING COSTS - Co reported declines in network operations and SG&A expenses, contributing to margin improvement
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Net Loss | $29.77 mln | ||
Q3 Adjusted EBITDA | Miss | $73.90 mln | $74.99 mln (11 Analysts) |
Q3 Gross Margin | 24.50% | ||
Q3 EBIT | Beat | -$6.93 mln | -$8.09 mln (10 Analysts) |
Q3 Loss Per Basic Share | Beat | $0.62 | $0.81 (10 Analysts) |
Q3 Adjusted Gross Margin | 47.60% | ||
Q3 Adjusted Gross Profit | $110.16 mln | ||
Q3 EBITDA | $48.90 mln | ||
Q3 Gross Profit | $56.68 mln |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 6 "hold" and 2 "sell" or "strong sell"
The average consensus recommendation for the integrated telecommunications services peer group is "buy."
Wall Street's median 12-month price target for Cogent Communications Holdings, Inc. is $13.00, about 91.5% above its November 4 closing price of $6.79
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)